Enrollment into Part C Medicare Advantage plans has reached an all-time high. Indeed, some of these plans even have a $0 premium, which attracts alot of enrolless. But… how can Medicare Advantage plans be free?
Read on for the scoop.
Medicare Pays the Part C Company
There is no such thing as a free lunch, and Medicare Advantage plans are no exception. When you enroll in a Medicare Advantage plan, you must first be enrolled in both Medicare Part A and B. Part B has a monthly premium, and you must continue to pay that to the government while you are enrolled in your Advantage plan.
Medicare then pays the Medicare Advantage plan on your behalf, to take on your medical risk. So while you might find a plan that has a $0 premium, that plan is definitely not free. The insurance company bills Medicare for your membership.
On Thursday it happened again. A long-time client of mine on a Medicare Advantage plan called the office with a whole list of problems. She and her husband underwent a full Medicare 101 conversation with me when they first became eligible for Medicare. She understood all of her options, both for Medicare Advantage plans and for Medicare supplements.
The client, being on a fixed income, decided on a $0 premium Medicare Advantage plan. Their doctor participated in the plan’s network at the time. They both felt the copays that the plan required were reasonable.
As I tell all my clients, you get what you pay for. With a Medicare supplement, the insurance costs more in monthly premiums, but you rarely have problems with access to providers. You almost never have unexpected out of pocket expenses for Medicare-approved services.
Medicare Advantage plans, on the other hand, require a bit more effort on the part of the client. Yes, a $0 premium or even a $25 or $50 monthly premium is attractive. However, you will pay copays for your services as you go along. Sometimes those copays are more than you anticipate.
In this instance, my client had a severe stomach ache. Her primary care doctor sent her downstairs to the imaging center for some diagnostic testing. Later on, she received a bill for $339 for the imaging procedure. You see, her doctor copay doesn’t also cover the diagnostic exam. She pays for that separately on a Medicare Advantage plan.
You must also understand that your Medicare Advantage plan often operates only in certain counties. You must choose providers in the network if you want to have the lowest copays. There are also sometimes restrictions which you have to work with.
For instance, let’s say your plan requires a referral for your primary care doctor to see a specialist. You have to wait for that paperwork to be completed before you actually see the specialist. If you get the procedure done before the approval comes through, you’ll foot the bill for the entire procedure.
Invariably, our clients want the agent to do something about this. However, in a case like this, the plan functioned just as it states that it will in her evidence of coverage document. It is the responsibility of the Medicare beneficiary to ensure that they use network providers. My client said she was in a lot of pain. It just hadn’t occurred to her to ask.
She can certainly appeal to the carrier and state this and then ask them to please consider covering this as in network. It is possible the carrier will consider her argument and cover the bill. It is also possible they will deny the appeal. They may say she was able to walk into the facility on her own two feet, so she was certainly capable of checking network participation.
You Get What You Pay For
The bottom line: Medicare Advantage plans are not free, even if they have a $0 premium. They are private Medicare health plans that often have lower premiums, but in exchange for that lower premium, you have to play by the plan’s rules. It requires more effort on your part, and you must be an advocate for yourself. Always check at the point of service to ensure you are seeing an in-network provider.
Also, even though the premium might be low, you are responsible for paying plan copays and coinsurance, and sometimes those costs are not cheap. You might have a hospital stay for a surgery, and in most cases, you will pay the copay for the hospital AND a separate copay to the surgeon for performing the surgery.
This being said, let’s be clear that Medicare Advantage plans are not bad plans. They just work differently than Medicare supplements so you, as the consumer, need to understand all the potential exposure for spending. You also need to be diligent about things like obtaining prior authorizations for certain procedures or checking the network to determine provider participation. If you are okay with this bit of extra legwork, then these plans can work out just fine for you.
Have further questions about free Medicare Advantage plans? Call our friendly team here for more insight into these plans and help determining which plan is suitable for you.